SMART SECTOR WITH CATASTROPHIC STOP
This proactive, adaptive strategy was codeveloped by Day Hagan Asset Management (DH) in partnership with Ned Davis Research (NDR), a leading independent provider of global economic and financial analysis.
THE STRATEGY SEEKS TO
Enhance returns over a buy-hold, equity benchmark by overweighting and underweighting S&P 500 sectors based on NDR’s proprietary sector model
Mitigate the effects of major market declines by reducing equity market exposure through the use of NDR’s Catastrophic Stop model
AN OBJECTIVE, WEIGHT-OF-THE-EVIDENCE APPROACH
Sector Selection: Determine each sector’s probability of outperforming the S&P 500 total return index by combining sector-specific fundamental, technical, economic, and behavioral indicators
Catastrophic Stop: Identify periods of high risk for the broad U.S. equity market through time-tested indicators measuring breadth, trend, fundamentals, economics, interest rates, sentiment, and volatility
The strategy remains fully invested unless the Catastrophic Stop model is triggered, whereupon the equity-invested position is reduced to 50%
When the Catastrophic Stop model moves back to bullish, indicating lower risk, the strategy immediately returns to being fully invested.
Don began his career in 1988 with Ned Davis Research and became Chief Sector Analyst and editor of several publications. He was then named Director of Research and Portfolio Manager for SCI Capital Management in 1996. SCI was acquired by Wells Fargo in 2001, and Don became a member of the Wells Fargo PCS National Investment Management Committee. He has been a CFA charter holder since 1994.
Art’s career began in 1984 with Dean Witter Reynolds. In 1987, he joined E.F. Hutton/Shearson Lehman Brothers, and in 1993 joined PaineWebber/UBS as First Vice President of Investments. In 1999, Art began his association with Engagement Systems as an investor and owner. Art contributed to the company’s development of their “Skill Weighted Portfolio Methodology” which emphasized index funds and ETFs due to their inherent market efficiencies.
Regan is a graduate of Ashland University (Ohio) with a degree in Asset Management Finance. His experience consists of interning with Day Hagan during his college career, and he was a member of a group of students who managed the University’s $750,000 endowment fund. He also has a background in derivative trading.
Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended by the adviser), will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance, strategy and results of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio. Economic factors, market conditions, and investment strategies will affect the performance of any portfolio and there are no assurances that it will match or outperform any particular benchmark.
This model was developed in conjunction with Ned Davis Research.
Day Hagan Asset Management is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses.